THE TECH YOU NEED TO KNOW
Quick Takes
1. AI Is Changing
Work—and Leaders
Need to Adapt
→ by MARTIN FLEMING
A S A RT I F I C I A L I N T E L L I G E N C E
(AI) is increasingly incorpo-
rated into our workplaces
and daily lives, it is poised
to fundamentally upend the
way we live and work. Con-
cern over this looming shift is
widespread. A recent survey
of 5,700 Harvard Business
School alumni found that
52% of even this elite group
46 HBR Special Issue
Summer 2021
believe the typical company
will employ fewer workers
three years from now.
The advent of AI poses new
and unique challenges for
business leaders. They must
continue to deliver financial
performance while simul-
taneously making signifi-
cant investments in hiring,
workforce training, and new
technologies that support
productivity and growth.
These seemingly competing
business objectives can make
for difficult, often agonizing,
leadership decisions.
Against this backdrop, re-
cent empirical research by our
team at the MIT-IBM Watson
AI Lab provides new insight
into how work is changing in
the face of AI. By examining
these findings, we can create
a road map for leaders intent
on adapting their workforces
and reallocating capital, while
also delivering profitability.
The stakes are high. AI
is an entirely new kind of
technology, one that can
anticipate future needs and
provide recommendations
to its users. For business
leaders, that unique capability
has the potential to increase
employee productivity—­­by
taking on administrative
tasks, providing better pricing
recommendations to sellers,
and streamlining recruitment,
to name a few examples.
For business leaders
navigating the AI work-
force transition, the key to
unlocking the productivity
potential while delivering
on business objectives lies in
three key strategies: rebal-
ancing resources, investing
in workforce reskilling, and,
on a larger scale, advancing
new models of education and
lifelong learning.
SOLUTION 1
Reallocate Capital
Resources
Our research report offers
a window into how AI will
change workplaces through
the rebalancing and restruc-
turing of occupations. Using
AI and machine learning
techniques, our MIT-IBM
Watson AI Lab team analyzed
170 million online job posts
between 2010 and 2017. The
study’s first implication:
While occupations change
slowly—over years and even
decades—tasks become reor-
ganized at a much faster pace.
Jobs are a collection of
tasks. As workers take on jobs
in various professions and
industries, it is the tasks they
perform that create value.
With the advancement of
technology, some existing
tasks will be replaced by AI
and machine learning. But
our research shows that only
2.5% of jobs include a high
proportion of tasks suitable
for machine learning. These
include positions like usher,
lobby attendant, and ticket
taker, where the main tasks
involve verifying credentials
and allowing only authorized
people to enter a restricted
SHANA NOVAK/GETTY IMAGES
space.
Most tasks will still be
best performed by humans—
whether craft workers like
plumbers, electricians, and
carpenters, or those who do
 Millions of workers will need to be retrained
or reskilled as a result of AI over the next three years.
design or analysis requiring
industry knowledge. And
new tasks will emerge that
require workers to exercise
new skills.
As this shift occurs,
business leaders will need to
reallocate capital accordingly.
Broad adoption of AI may
require additional research
and development spend-
ing. Training and reskilling
employees will most likely
require temporarily remov-
ing workers from revenue-­
generating activities.
More broadly, salaries and
other forms of employee
compensation will need to
reflect the shifting value of
tasks all along the organi-
zation chart. Our research
shows that as technology re-
duces the cost of some tasks
because they can be done in
part by AI, the value work-
ers bring to the remaining
tasks increases. Those tasks
tend to require grounding in
intellectual skill and insight—
something AI isn’t as good at
as people.
In high-wage business and
finance occupations, for
example, compensation
for tasks requiring industry
knowledge increased by more
than $6,000, on average,
between 2010 and 2017. By
contrast, average compen-
sation for manufacturing
and production tasks fell by
more than $5,000 during that
period. As AI continues to
reshape the workplace, busi-
ness leaders who are mindful
of this shifting calculus will
come out ahead.
SOLUTION 2
Invest in Workforce
Training
Companies today are held
accountable not only for
delivering shareholder value
but for positively impacting
stakeholders such as custom-
ers, suppliers, communities,
and employees. Moreover,
investment in talent and other
stakeholders is increasingly
considered essential to deliv-
ering long-term financial re-
sults. These new expectations
are reflected in the Business
Roundtable’s recently revised
statement on corporate gov-
ernance, which underscores
corporations’ obligation to
support employees through
training and education “that
help develop new skills for a
rapidly changing world.”
Millions of workers will
need to be retrained or
reskilled as a result of AI
over the next three years,
according to a recent IBM
Institute for Business Value
study. Technical training will
certainly be a necessary com-
ponent. As tasks requiring
intellectual skill, insight, and
other uniquely human attri-
butes rise in value, executives
and managers will also need
to focus on preparing workers
for the future by fostering and
growing “people skills” such
as judgment, creativity, and
effective communication.
Through such efforts, leaders
can help their employees shift
to partnering with intelligent
machines as tasks transform
and change in value.
SOLUTION 3
Educate for the
Future Today
As AI continues to scale
within businesses and across
industries, it is incumbent
upon innovators and business
leaders to understand not
only the business process
implications but also the
societal impact. Beyond the
need for investment in re-
skilling within organizations
today, executives should
work alongside policymakers
and other public and private
stakeholders to provide
support for education and
job training, encouraging
investment in training and
reskilling programs for all
workers.
Our research shows that
technology can disproportion-
ately impact the demand and
earning potential for midwage
workers, causing a squeeze
on the middle class. For every
five tasks that shifted out of
midwage jobs, we found that
four tasks moved to low-wage
jobs and one moved to a high-
wage job. As a result, wages
are rising faster in the low- and
high-wage tiers than in the
midwage tier.
New models of education
and pathways to continuous
learning can help address the
growing skills gap, provid-
ing members of the middle
class, as well as students and
a broad array of midcareer
professionals, with oppor-
tunities to build in-demand
skills. Investment in all forms
of education is key: commu-
nity college, online learning,
apprenticeships, or programs
like P-TECH, a public-private
partnership designed to
prepare high school students
for “new collar” technical
jobs like cloud computing and
cybersecurity.
Whether it is workers who
are asked to transform their
skills and ways of working,
or leaders who must rethink
everything from resource allo-
cation to workforce training,
fundamental economic shifts
are never easy. But if AI is to
fulfill its promise of improving
our work lives and raising liv-
ing standards, senior leaders
must be ready to embrace the
challenges ahead.
HBR Reprint H05EYF
Originally published on HBR.org
March 24, 2020
Martin Fleming is IBM’s
chief economist and former
vice president.
HBR Special Issue
Summer 2021 47
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